Fonash 2008 WL 5248175 (Bankr.M.D.Pa.), Bankr. L. Rep. P 81,380

Chapter 7 debtor failed to sufficiently document student loan expenses raised as "special circumstance."

Regardless of whether a Chapter 7 debtor's student loan expenses might constitute a "special circumstance," of a kind sufficient to rebut the "means test" presumption of abuse and to prevent the case from being dismissed, a debtor who failed to provide any documentation of these expenses, with the exception of the "means test" form itself, did not satisfy the procedural burden of the "special circumstances" provision. A debtor seeking to show "special circumstances," of a kind sufficient to rebut the "means test" presumption that his Chapter 7 filing is an abuse of the provisions of that chapter, bears both a procedural and substantive burden.

Blausey v. US Trustee, No. 07-15955

Dismissal of a petition for Chapter 7 bankruptcy is affirmed where private disability insurance benefits are income that should be included in petitioners' current monthly income under the statutory means test, and with the benefits included the petitioners' current monthly income was high enough to trigger a presumption of abuse.

Full opinion click here,

Owsley 2008 WL 868044 (Bankr.N.D.Tex.)

Plans - Recreational vehicle had to be necessary to support for payments thereon to be deductible by high-income Chapter 13 debtors.

The "secured debt" portion of the "means test" formula for calculating the reasonable, necessary expenses of above-median-income Chapter 13 debtors consists of two apparently independent subclauses, one of which allows debtors to deduct "amounts scheduled as contractually due" to secured creditors with no apparent requirement that the property on which such payments are due must be necessary to the support of the debtor or the debtor's dependents 11 U.S.C.A. 707(b)((2)(A)(iii)(I), and only the second of which, that authorizing a deduction for any "additional payments" on secured debts on which the debtor defaulted prepetition 707(b)((2)(A)(iii)(II), expressly requires any showing that the collateral is necessary to the support of the debtor or his/her dependents. Nonetheless, in order to avoid an absurd result, a bankruptcy court interpreted this "necessity to support" requirement as applying to both subclauses, so as to prevent above-median income Chapter 13 debtors from taking a deduction for their payments on a recreational vehicle absent a showing by the debtors that this recreational vehicle was necessary for the support of themselves or their dependents.

STEVEN KETH MOWRIS and MARILYN SUE MOWRIS,Case No. 07-61100

Above-median Chapter 7 debtors are not permitted take a deduction on the means test for payments on loans against retirement accounts.

Date of opinion: 3/17/08

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In re Weiderhold, (Bkrtcy.M.D.Pa.)

Case Administration - Chapter 7 debtors were entitled to vehicle ownership expense deduction for vehicles that they owned outright.

Under the "means" test, as applied to determine whether the debtors' Chapter 7 case should be dismissed as presumptively abusive, debtors were entitled to deduct the standard vehicle ownership expenses for which they qualified based on the number of vehicles which they owned and the locality in which they resided, as being the "applicable" vehicle ownership expense deduction to which they were entitled, even though they owned their vehicles outright and thus had no "actual" vehicle ownership expenses. The term "applicable," as used by Congress in formulating the "means" test, had to be contrasted with "actual," as used elsewhere by Congress in allowing a debtor to deduct only his/her "actual monthly expenses" for Other Necessary Expenses, and referred to what was appropriate, as opposed to what was actual or real.

In re Hartwick,

The court held that you can deduct ownership expense even though the vehicle was free and clear of any liens.

Date of the decision: 10/13/06

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In re Mordis 06-42590

Whether or not the repayment of a 401(k) loan could be used on the means-test to avoid substantial abuse. Judge MacDonald decided that the 401(k) repayment are not the type of expenses that should be deducted from the income when calculating substantial abuse under §707(b)(2)(A)(ii),(iii), or (iv).

Date of decision: 10/9/07

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In re Burden, Case No. 07-50366

Debtors could not claim "means test" deductions for payments on debts secured by two pieces of property they intend to surrender. In the absence of these deductions, the Debtors have sufficient disposable income to trigger the presumption of abuse under section 707(b)(2) of the Bankruptcy Code.

Date of the decision: 12/20/07

Full opinion click here.